Negotiations intended to result in a contract were expressly on the basis that each party was free to withdraw from the negotiations at any time, the costs of a party in preparing for the intended contract were incurred at its own risk and it was not entitled to recover them by way of restitution if for any reason no contract resulted. It was held that by the deliberate use of the words ‘subject to contract’ in their usual sense, each party had accepted that if no contract was concluded any resultant loss should lie where it fell.
Held: The costs of the failed negotiations were not recoverable. The phrase ‘subject to contract’ is so widely used that parties must be assumed to know its effect without having it explained.
Rattee J
Gazette 25-Jan-1995, [1995] 1 WLR 212, [1995] Ch 212
England and Wales
Cited by:
Cited – Gonthier and Another v Orange Contract Scaffolding Ltd CA 25-Jun-2003
The question of a proprietary estoppel as between landlord and tenant arose. An agreement had been reached subject to contract for the grant of a lease, with an option to purchase. The tenant was allowed into possession before the documentation was . .
Cited – Countrywide Communications Limited v ICL Pathway Ltd 1996
The court considered the authorities bearing on the question of whether or not a claim under a quantum meruit can successfully be made for work done in anticipation of a contract which does not materialise. Strauss J concluded: ‘I have found it . .
Cited – MSM Consulting Ltd v United Republic of Tanzania QBD 30-Jan-2009
The claimants sought commission or a quantum meruit for the part they had taken in finding a suitable site for the defendant’s High Commission in London.
Held: The works undertaken were consistent with the claimant seeking work from the . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 October 2021; Ref: scu.85943
